Untitled Document

HUMAN RESOURCES DEVELOPMENT ACT 1992

(Act 491)

ARRANGEMENT OF SECTIONS

PART I

PRELIMINARY
Section

1. Short title and application.
2. Interpretation.

PART II

HUMAN RESOURCES DEVELOPMENT LEVY

3. Imposition of levy.
3A. Imposition of levy on specified employer.
3B. Interest on levy due but not paid in time.
4. Duty of employer to register with Council.
5. Exemption from levy.

PART III

ELIGIBILITY FOR FINANCIAL ASSISTANCE

6. Qualifying conditions.
7. Penalty for obtaining money or benefit by false or misleading
statement or document.
8. Repayment.

PART IV

HUMAN RESOURCES DEVELOPMENT FUND

9. Establishment of Fund.
10. Recovery of levy and loan.
11. Investment Panel.
12. Power to invest.

PART V

HUMAN RESOURCES DEVELOPMENT COUNCIL

Section

13. Establishment of Council.
14. Council to be Trustee of Fund.
15. Members of the Council.
16. Alternate members.

17. Temporary exercise of functions of Chairman.
18. Functions of the Council.
19. Powers of the Council.
20. Appointment of officers and servants of the Council.
21. Members, officers and servants deemed to be public servants.
22. Committees.

PART VI

EXECUTING AGENTS

23. Appointment of agent.
24. Duty of agent to maintain proper records.

PART VII

ACCOUNTS AND AUDIT

25. Application of Statutory Bodies (Accounts and Annual Reports)
Act 1980.

PART VIII

GENERAL PROVISIONS

26. Offences by body corporate.
27. Regulations.
28. Power of Minister to give directions.
29. Appeals.
30. Secrecy.

SCHEDULES.

HUMAN RESOURCES DEVELOPMENT ACT 1992

(Act 491) (In Force From 1-1-1995)

An Act to provide for the imposition and collection of a human
resources development levy for the purpose of promoting
the training of employees, the establishment of a Human
Resources Development Council and Fund and for matters
connected therewith

BE IT ENACTED by the Duli Yang Maha Mulia Sen
Paduka Baginda Yang di-Pertuan Agong with the advice
and consent of the Dewan Negara and Dewan Rakyat in
Parliament assembled, and by the authority of the same, as
follows:

PART I

PRELIMINARY

1. Short title and application.

(1) This Act may be cited as the Human Resources De-
velopment Act 1992.

(2) This Act shall apply to the classes of employers in the
industries specified in the First Schedule.

(3) The Minister may, from time to time, by an order
published in the Gazette, add to, delete from, vary or amend
the First Schedule.

2. Interpretation.

In this Act, unless the context otherwise requires—

"apprenticeship contract" means a written contract entered [Am. Act
into by a person with an employer who undertakes to employ A956]
the person and train or have him trained systematically for a
trade for a specified period approved by the Director-General
in the course of which the apprentice is bound to work in the
employer's service;

"contract of service" means any agreement, whether oral
or in writing and whether express or implied, whereby one
person agrees to employ another as an employee and that other
agrees to serve his employer as an employee and includes an
apprenticeship contract;

"Council" means the Human Resources Development Council
established under section 13;

"Director General" means the Director General appointed
under section 20;

"domestic servant" means a person employed in connection
with work of a private dwelling-house and not in connection
with any trade, business or profession carried on by an employer
in such dwelling-house and includes a cook, house-servant,
butler, child's nurse, valet, gardener, washerman or
washerwoman, watchman and driver or cleaner of any vehicle
licensed for private use;

"employee" means any citizen of Malaysia who is employed
for wages under a contract of service with an employer, but
does not include any domestic servant;

"employer" means any person who has entered into a contract
of service to employ any other person as an employee and
includes the agent, manager or factor of such first-mentioned
person;

"Fund" means the Human Resources Development Fund
established under section 9;

"levy" means the human resources development levy im-
posed under section 3 or 3A;

"wages" means the basic salary and fixed allowances or other
emoluments of a like nature paid in cash by or on behalf of
an employer to an employee, and includes any leave pay and
arrears of wages but does not include—

(a) any contribution paid by an employer on his own
account to any pension fund, provident fund, super-
annuation scheme, retrenchment, termination, lay-off
or retirement scheme, thrift scheme or any other fund
or scheme established for the benefit or welfare of
the employee;

(V) any travelling allowance or the value of any travelling
concession;

{d) any gratuity payable on discharge or retirement; or
(e) any bonus or commission.

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PART II

HUMAN RESOURCES DEVELOPMENT LEVY

3. Imposition of levy.

(1) Subject to section 5, there shall be imposed on every
employer a human resources development levy in respect of
each of his employees at the rate of one per centum of the
wages in any month of the employee.

(2) The Minister may, from time to time, by order published
in the Gazette reduce or increase the rate of the levy specified
in subsection (1).

(3) Where an employer fails to pay any levy due within
such period as may be prescribed, the employer shall be guilty
of an offence and shall, on conviction, be liable to a fine not
exceeding ten thousand ringgit or to imprisonment for a term
not exceeding two years or to both.

(4) Prosecution for an offence under subsection (3) shall
not preclude the right of the Council to recover the amount
of any levy due under this Act from the employer.

3A. Imposition of levy on specified employer.

(1) Notwithstanding subsections 1 (2) and 3( 1), an employer
in the manufacturing industry with ten but not more than forty-
nine employees and with a paid-up capital of less than two
million and five hundred thousand ringgit, and who opts to
be registered with the Council, shall be imposed a human
resources development levy in respect of each of his employees
at the rate of 0.5 per centum of the wages in any month of
the employee.

(2) In the event of any default in the payment of any levy
due under subsection (1), the provisions of subsections 3(3)
and (4) shall apply.

3B. Interest on levy due but not paid in time.

An employer who fails to pay any levy due within such
period as may be prescribed, shall be liable to pay interest
thereon at the rate of ten per centum per annum in respect
of each day of default or delay in payment:

Provided that—

(a) if the amount of interest so calculated is less than five
ringgit, the interest payable shall be five ringgit in
respect of each month or part of a month of the default
or delay in payment; or

(b) if the amount of interest so calculated exceeds five
ringgit, the interest payable shall be calculated to the
next highest ringgit in respect of each month or part
of a month of the default or delay in payment.

4. Duty of employer to register with Council.

(1) Every employer to whom this Act applies shall register
with the Council within such time and in such manner as may
be prescribed.

(2) Any employer who contravenes subsection (1) shall be
guilty of an offence and shall, on conviction, be liable to a
fine not exceeding five thousand ringgit or to imprisonment
for a term not exceeding one year or to both.

(3) Where any person ceases to be an employer under this
Act, he shall within thirty days of such cessation notify the
Council in such manner as may be prescribed.

(4) Any person who contravenes subsection (3) shall be
guilty of an offence and shall, on conviction, be liable to a
fine not exceeding two thousand ringgit or to imprisonment
for a term not exceeding six months or to both.

(5) The Council shall maintain a register of all employers
registered under this Act, together with a record of any payments
made.

5. Exemption from levy.

The Minister may, from time to time, by order published
in the Gazette exempt fully or partly any of the employers
or class of employers from the payment of the levy in such
circumstances and subject to such conditions as may be pre-
scribed in the order.

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PART III

ELIGIBILITY FOR FINANCIAL ASSISTANCE

6. Qualifying conditions.

(1) Subject to section 5, any employer who has paid the
levy upon registration shall be eligible to receive any financial
assistance or other benefit provided under this Act for the
purpose of promoting the training of his employees.

(2) Where an employer has acquired the interests of another
employer registered under section 4, the first-mentioned employer
shall be substituted for that other employer and shall be eligible
to receive or continue to be in receipt of any financial assistance
or other benefit provided under this Act, as the case may be.

(3) Any employer who is in receipt of, or eligible to receive,
any financial assistance or other benefit provided under this
Act shall be disqualified from receiving such financial assis-
tance or other benefit if he is in default of any payment of
the levy and such disqualification shall remain until such time
that all outstanding payments and interest thereon have been
fully paid-up.

7. Penalty for obtaining money or benefit by false or
misleading statement or document.

Any person who obtains any financial assistance or other
benefit provided under this Act by means of any false or
misleading statement or document shall be guilty of an offence
and shall, on conviction, be liable to a fine not exceeding ten
thousand nnggit or to imprisonment for a term not exceeding
two years or to both.

8. Repayment.

Where a person is convicted of an offence under section
7 the court may, in addition to imposing a penalty under that
section, order the person to make repayment of the amount
of money or value of benefit wrongfully obtained.

PART IV

HUMAN RESOURCES DEVELOPMENT FUND

9. Establishment of Fund.

(1) For the purpose of this Act there shall be established
a Human Resources Development Fund, into which shall be
paid—

(a) all monies collected by way of levy under sections
3 and 5A;

(b) all monies recoverable from loans granted under this
Act;

(c) all monies earned or arising from any property,
investments, charges or debentures acquired by or
vested in the Council; and

(d) any gift, donation, contribution or any other sums
received from any source.

(2) The Fund shall be expended for the purpose of—

(a) the promotion, development and upgrading of skills
of employees including the provision, establishment,
expansion, upgrading or maintenance of training
facilities;

(b) the provision of financial assistance to employers by
way of grant, loan or otherwise for the purposes
mentioned in paragraph (a) including defraying or
subsidising the costs incurred by any employer in the
training or retraining of his employees;

(c) carrying out, subject to such terms and conditions
as may be approved by the Minister, of activities or
proj ects to train or retrain retrenched persons or persons
to be retrenched;

{d) paying any expenses lawfully incurred by the Council
including any fees and costs, the remuneration of
officers and servants employed by the Council, and
allowances payable to any member of the Council,
Investment Panel or any committee established under
this Act; and

(e) generally paying any expenses for carrying into effect
the provisions of this Act and in connection with the
administration of the Fund.

10. Recovery of levy and loan.

Any levy payable or loan granted under this Act, together
with any interest thereon, shall be a debt due to and be re-
coverable by the Council.

11. Investment Panel.

(1) There shall be established an Investment Panel which
shall, subject to such directions as may be issued by the Council,
be responsible for matters pertaining to the investments of the
Fund.

(2) The Investment Panel shall consist of—

(a) the Chairman of the Council or any person for the
time being acting as Chairman of the Council, as
Chairman;

(b) two members appointed by the Council from amongst
its members;

(d) a representative from the Ministry of Finance;

(e) a representative from Bank Negara, Malaysia; and

(f) two other persons with business and financial expe-
rience to be appointed by the Minister.

(3) A person appointed in accordance with paragraph (2)
(f) shall serve for a period of two years from the date of his
appointment.

(4) The provisions of the Second Schedule shall apply to
the members of the Investment Panel.

12. Power to invest.

(1) The Investment Panel may, from time to time, invest
the Fund or any part thereof not being monies immediately
required for meeting the Fund's obligations and expenses—

(a) in investments or securities authorised for the invest-
ment of trust funds by any written law for the time
being in force; or

(b) in shares and debentures in any public company the
prices of which are quoted or sought to be quoted
on the stock exchange established in Malaysia; and

Provided that any investment made under this Act may be
varied, transposed or realised from time to time.

(2) The Minister in consultation with the Minister of Finance
may, at any time, direct the vacation in part or in whole, or
prohibit investment, in any security or class of securities.

(3) For the purposes of this section—

"debenture" includes debenture stock, bonds, notes or any
other securities or obligations of a company, whether consti-
tuting a charge on the assets of the company or not, and also
includes the right to subscribe for any debenture;

"share" means the paid-up shares (whether fully paid or not)
in the share capital of a company and includes stock and right
to subscribe for any stock or share.

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PART V

HUMAN RESOURCES DEVELOPMENT COUNCIL

13. Establishment of Council.

There shall be established a Council called the "Human
Resources Development Council" which shall be a body
corporate with perpetual succession and a common seal and
which may sue and be sued in its corporate name and, subject
to and for the purposes of this Act, may enter into contracts
and may acquire, purchase, take, hold and enjoy movable and
immovable property of every description, and may convey,
assign, surrender, yield up, charge, mortgage, demise, reassign,
transfer or otherwise dispose of, or deal with, any movable
or immovable property or any interest therein vested in the
Council upon such terms as it thinks fit.

14. Council to be Trustee of Fund.

The Council shall be the Trustee of the Fund.

15. Members of the Council.

(1) The Council shall consist of fourteen members who shall
be appointed by the Minister, of whom—

(a) ten persons shall be representatives of employers; and

(b) four persons shall be representatives of government
or public sector agencies responsible for manpower
development or training.

(2) The Minister may, in addition to the persons mentioned
in subsection (1), appoint to be members of the Council not
more than two persons who, in the opinion of the Minister,
are able to contribute to the work of the Council.

(3) The Minister shall appoint among the persons mentioned
in subsection (1) a Chairman and Deputy Chairman of the
Council. The person appointed to be Chairman shall be a
member appointed under subsection (l)(a).

16. Alternate members.

(1) The Minister may, in respect of each of the members
of the Council other than the Chairman, Deputy Chairman and
members appointed under section 12 (2), appoint a person to
be an alternate member to attend meetings of the Council in
place of the member when the member is for any reason unable
to attend.

(2) When attending meetings of the Council in place of a
member, an alternate member shall for all purposes be deemed
to be a member of the Council.

(3) An alternate member shall cease to be an alternate
member when the member in respect of whom he is an alternate
member ceases to be a member of the Council.

(4) The provisions of the Third Schedule shall apply to the
members of the Council.

17. Temporary exercise of functions of Chairman.

(1) If for any reason the Chairman is unable to attend a
meeting of the Council or during the absence of the Chairman
at a Council meeting, the Deputy Chairman shall exercise the
powers of Chairman.

(2) In the event that both the Chairman and Deputy Chair-
man are unable to attend a meeting of the Council, the remaining
Council members shall elect from among themselves a person
to be Chairman for the duration of the meeting and the person
so elected shall be deemed to be temporarily exercising the
powers of the Chairman.

18. Functions of the Council.

The functions of the Council shall be—

(a) to assess and determine the types and extent of employee
training and retraining in keeping with the human
resources needs of industries;

(b) to promote and stimulate manpower training; and

19. Powers of the Council.

The Council shall have power to do all things expedient
or reasonably necessary for or incidental to the carrying out
of its functions, and in particular, but without prejudice to the
generality of the foregoing provisions—

(a) to collect and recover or cause to be collected and
recovered all monies due to the Fund;

(b) to establish guidelines for processing applications to
the Fund for financial assistance;

(c) to determine the terms and conditions for the making
of grants or loans from the Fund, including the amounts
that may be approved in respect of each application;

(d) to determine the proportion of monies of the Fund
which should be used for grants or for loans, including
the proportion that should be provided in the form
of a grant or by way of a loan in respect of each
approved application;

(e) to organize, establish, upgrade and maintain, or to
assist in the organization, establishment, upgrading
and maintenance of, training facilities;

(f) to organize and supervise, or to assist in the orga-
nization and supervision of, the implementation of
training courses, projects and programmes; and

(g) to examine any records, accounts and any other
document relating to the grant, loan or any other
benefit granted under this Act to any employer to
ensure due compliance by the employer of the pro-
visions of this Act.

20. Appointment of officers and servants of the Council.

The Council may appoint a chief executive to be designated as
the Director-General and such other officers and servants as it
considers necessary for the carrying out of its functions on such
terms and conditions as may be determined by the Council.

21. Members, officers and servants deemed to be public servants.

The members of the Council and of the Investment Panel,
the Director-General and the other officers and servants of the
Council shall be deemed to be public servants within the
meaning of the Penal Code.

22. Committees.

The Council may set up committees consisting of members
of the Council or persons who are not members of the Council
or a combination of both to advise or assist the Council on
such matters concerning its functions as it considers fit, and
the Council may delegate subject to such conditions or restric-
tions as it may impose, such of its functions as it considers
fit to any such committees.

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PART VI

EXECUTING AGENTS

23. Appointment of agent.

(1) The Council may, with the approval of the Minister,
employ and pay agents to do any act required to be done in
the exercise of its powers or for the better carrying into effect
of the purposes of this Act.

(2) The Council shall enter into an agreement in writing
with the agent employed under subsection (1) and such agree-
ment shall specify the duties, responsibilities and obligations
of the agent.

(3) The Council may, with the prior approval of the Minister,

issue to the agent such sums of money from the Fund to be
held in trust by the agent, on such terms and conditions as
may be imposed by the Council, for the purpose of carrying
out the objects of this Act.

24. Duty of agent to maintain proper records.

(1) Any agent employed by the Council under section 23
shall keep and maintain proper and updated records and accounts
of all matters connected with its duties, responsibilities and
obligations.

(2) The Council shall have power to examine and audit the
records and accounts of the agent.

(3) Any person who destroys, conceals, mutilates or alters any
record or account required to be kept or maintained under
subsection (1) that will result or is likely to result in financial loss
to the Council shall be guilty of an offence and shall, on
conviction, be liable to a fine not exceeding ten thousand ringgit
or to a term of imprisonment not exceeding two years or to both.

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PART VII

ACCOUNTS AND AUDIT

25. Application of Statutory Bodies (Accounts and Annual
Reports) Act 1980.

The provisions of the Statutory Bodies (Accounts and Annual
Reports) Act 1980 shall apply to the Council.

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PART VIII

GENERAL PROVISIONS

26. Offences by body corporate.

Where an offence under this Act is committed by a body
corporate, any person who at the time of the commission of
the offence was a director, manager, secretary or other like officer
of the body corporate, or was purporting to act in any such
capacity, shall as well as such body corporate be deemed to
be guilty of that offence unless he proves that the offence was
committed without his consent or connivance and that he exercised
all such due diligence to prevent the commission of that offence
as he ought to have exercised, having regard to the nature of
his functions in that capacity and to all the circumstances.

27. Regulations.

The Minister may make regulations prescribing all matters
and things required by this Act to be prescribed, or which are
necessary or expedient for giving full effect to the provisions
of this Act, for the carrying out of or achieving any purposes
of this Act or any provision thereof, or for the further, better
or more convenient implementation of the provisions of this Act.

28. Power of Minister to give directions.

The Council shall be responsible to the Minister, and the
Minister may give directions not inconsistent with the provi-
sions of this Act and the Council shall, as soon as possible,
give effect to all such directions.

29. Appeals.

(1) Any person who is aggrieved by a decision of the Council
or its agent may, within thirty days from the date on which
the notice of the decision of the Council is served on him,
appeal to an appeal committee comprising three members who
are not members of the Council, established and appointed by
the Minister.

(2) The decision of the appeal committee shall be final and
conclusive.

(3) A member of the appeal committee may be paid such
allowances as may be determined by the Minister.
30. Secrecy.

(1) Except for any of the purposes of this Act or for the
purpose of any civil or criminal proceedings under this Act,
no member, officer, servant or agent of the Council shall
disclose any information which has been obtained by him in
the course of his duties under this Act.

(2) Any person who contravenes subsection (1) shall be
guilty of an offence and shall, on conviction, be liable to a
fine not exceeding two thousand ringgit or to imprisonment
for a term not exceeding six months or to both.

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